Investment in property can be lower or higher risk than investing in top Australian companies, depending on factors like the type of property. Residential properties like units and houses have relatively low starting prices and are easy to get loans for but commercial properties require more experience. Currently, rental yields are higher than average due to rising rents and limited new property supply, but the RBA is concerned about a potential property bubble and is raising interest rates, which could slow strong property price growth.

1. GENC3003Personal Financial PlanningAndrew Hingstonandrew.hingston@unsw.edu.auUnit 11: Investing in property

2. 2DiscussionDo you think that buying an investment property is higher or lower risk than buying shares in 20 top Australian companies?

3. 3Investment propertiesResidential propertiesUnit, Townhouse, Duplex, HouseLarge quantity available and relatively low starting pricesRelatively easy to buy and easy to get loanGrowth in price in long-term if demand outstrips supplyCommercial propertiesShop, OfficeHarder to buy and requires more experienceHigher rental yield than residential propertyPrices move in different cycle to residential property

4. 4Investment propertiesCurrent situationThe last boom finished in 2003Rental yield dropped to historic low in 2003Rent has risen strongly recently due to increases in income and immigrationRental yields are now higher than long-term averageLittle new supply of properties due to global financial crisisShortage of rental properties pushing prices upRBA worried about property bubble so ↑ interest ratesStrong property price growth after end of recession?